12/22/2009 @ 7:00PM

College Football's Most Valuable Teams

The University of Texas Longhorns won’t play for the national championship until Jan. 7, but when it comes to team value, they’re already college football’s runaway winners.

That’s because the Texas Athletic Department has built a brand that would make most National Football League team owners blush. Of the $82 million generated by the team last season, $30 million came from donations by alumni and fans to get in line for season tickets. Another $33 million came from ticket sales to seven home games at the newly expanded Darrell K. Royal-Texas Memorial Stadium, which now fits 101,000 fans. Sponsorship agreements with
Coca-Cola
and
PepsiCo’s
Gatorade fed the team another $842,000.
Nike
paid $1 million to adorn Longhorns jerseys with its swoosh logo.

But it’s what the Longhorns were able to do with that money that makes them college football’s most valuable team. Unlike NFL teams, which can be bought and sold on the open market, college teams have value in terms of what kind of dividends they pay to their stakeholders. “Dividend” money is what’s left for the team’s university (for academic purposes, including scholarship payments for football players) and athletic department (to support non-revenue sports) after the cost of running the football operation in question. It also includes what’s generated for its conference (the distribution of bowl game revenue) and the community around the university (estimated incremental spending by visitors to the county that’s attributable to the program). In our scoring system, the first two factors were given the most weight, while county revenue was given the least.

In order to accurately make comparisons, we standardized the revenue and expense streams for each team, since the methods of reporting to the Department of Education are often inconsistent from school to school.

By our reckoning, the Longhorns cleared $59 million in the season for University of Texas academics and athletics. We put the capitalized value of the Longhorns at $119 million, $11 million more than second-ranked University of Notre Dame, which topped our previous two rankings.

There’s plenty of upside left in Notre Dame, which has decided to preserve its Knute Rockne, All-American image, at least for now. “If and when Notre Dame chooses to leverage the football team, it could make a lot more money,” says Louis Nanni, Notre Dame’s vice president for university relations. “We don’t even have a Jumbotron.” (Compare that to Texas, whose “Godzillatron” was the largest HD screen in the country when it was manufactured by
Daktronics
in 2006).

Notre Dame is one of only two teams on our list whose stadium has not undergone a major renovation or expansion over the last 10 years. Nanni says that maintaining the team’s traditional brand is important since it’s what alumni have come to expect and what lures them back to campus. It shows. St. Joseph County, Ind., was the only county in the nation where incremental spending topped $10 million on home football weekends this season.

The University of Alabama, which will play Texas in the championship game, is no slouch off the field, either. The team’s value of $92 million is 31% greater than before it lured head coach Nick Saban from the NFL in 2007. Because of their rich TV deals, 18 of the 20 teams on our list come from the Southeastern, Big 12 and Big Ten conferences.

New to the list: the 20th-ranked Oklahoma State Cowboys, worth $47 million. OSU has received $350 million in gifts from billionaire alumnus T. Boone Pickens this decade, including $250 million earmarked for the athletic department, whose football stadium now bears his name. “There’ll be more substantial contributions from me,” Pickens says, with one caveat: “I expect to win and expect to fill up the stadium.”